Bank lending rose modestly in May while growth in domestic liquidity slowed, signaling cautious momentum in credit activity amid ongoing efforts by the Bangko Sentral ng Pilipinas to balance inflation control and economic recovery.
Outstanding loans issued by universal and commercial banks climbed 11.3%, slightly higher than April’s 11.2% pace, the BSP said.
Total outstanding credit reached P13.37 billion, up from P13.25 billion the previous month.
The uptick was led by sustained demand from both businesses and households, although growth across key production sectors showed signs of softening.
Business loans rose 10.2%, marginally easing from 10.3% in April, as lending to real estate, wholesale and retail trade, transport, and storage decelerated. Credit to the manufacturing sector shrank 3% in May.
Consumer loans remained robust, growing 23.7% year-on-year, though slightly below April’s 24% growth. The category includes credit card, auto, motorcycle, and salary-backed loans.
Meanwhile, domestic liquidity —a broad measure of money circulating in the financial system—grew by 5.5% year-on-year to P18.4 trillion in May, decelerating from 5.8% in April.
The slowdown in money supply expansion comes amid the BSP’s calibrated monetary policy stance and tighter global financial conditions.
Claims on the domestic sector, comprising both public and private entities, expanded by 10.7%, while claims on the private sector rose 10.9%. Net claims on the central government increased by 9.1% due to higher borrowings.
Net foreign assets fell 4.6% in peso terms, deepening from a 0.2% decline in April.
The BSP reiterated its commitment to maintaining liquidity conditions in line with its dual mandate of price and financial stability.
“Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives,” it said.
The data comes ahead of the BSP’s next policy meeting, where analysts are watching closely for signals on whether rates will be held steady or adjusted, as inflation eases and credit continues to grow.
